Dealers Prevail On Incentive Pay Issue

December 10, 1998

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Dec. 11 – The American Truck Dealers Assn. reports that the IRS is abandoning efforts to require dealers to withhold taxes from manufacturer incentive payments paid to dealer personnel.
According to ATD’s “American Truck Dealer” newsletter, vehicle manufacturers traditionally pay incentives directly to sales personnel. The IRS claimed that a Maine dealership was required to treat the payments as wages subject to withholding. ATD, a division of the National Automobile Dealers Assn., met with the IRS and presented its position that the payments are not wages, and neither the manufacturers nor dealers should be required to pay FICA, FUTA or withholding taxes.

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